Co-operative Development – Role of Government in Cooperatives



Co-operative development societies especially the ones involving Anaocha development are still in their development stage in Anaocha local government area.

This chapter tries to review all the areas as it affects this project. The areas include:

i) Problems of co-operative development.

ii) Macro-effects of co-operative in Anaocha.

iii) Promotional efforts of the government in Anaocha towards co-operative development.

iv) Operational role of government of co-operative.


Co-operative development is hindered by some factors which results to poor development of the society in the economic growth of the country. This factors resulting from poor management of the enterprises because of the personnels involved in the project.

The poor managerial skill and knowledge leads to the stunt growth of the development of co-operative society. Thus, due to improper orientation and acknowledgement. Also, the problem of co-operative development is as a result of dishonesty among the leadership. Many cases involving embezzlement of fund among co-operative practitioners.

That is, the irregularities in the leadership of the co-operative society thus affects the development of co-operative society because misappropriation of fund both within and outside the co-operative complex contributes towards the development of co-operative society. This is because when adequate funding is given and well implemented, the co-operative development is assured.

Again, the poor member education and high rate of illiteracy among members contribute immensely towards the poor growth of co-operative society. Considering the high level of illiteracy among the members, the basic skills and knowledge required in the co-operative society is lacked. So, when the orientation on the methodology of co-operative is observed, the members ability to acquire the skill is poor and thus affects the growth of the co-operative.

Also, the apathy among members results to the poor co-operative development. That is, the low level of active participation by the members hinder the growth of the co-operative. So, the lower and non-challant behaviour exhibited by the member lead to poor output by the co-operation and the dividend will be low. In addition, government stifling control leading to over dependence on government handout tends to destabilize the economic growth of the nation due to the stifling control.

Consequently, the top-bottom approach which leads to lack of effective national integration of the Anaocha co-operative member is another factor affecting the co-operative development. Then, suspicion and distraction among co-operation practitioners leading to distorted approach in co-operative matter hinders the co-operative development in our country. That is, the lack of trust found among the co-operative practitioners in which fraud and other misconduct takes place.

Furthermore, the lack of qualified and trained executives or officers hinders the development of co-operative societies due to inexperience and unskilled in the management and operational methodology, the growth of co-operative sector is stunted and stagnant because of the creativity is lacked in their local government area.

But government in Nigeria do not give concession to specialized banks which will enable them to extend adequate funds to co-operative societies. Thus not promoting the development of co-operative societies. Also, majority of co-operative societies are moribund and do not create the impact expected of them.

That is, the non-challant attitude of co-operative in transfusing the created opportunity given to them towards reality.



The government takes no special interest in the co-operative movement outside providing it with the necessary legal basis for registration and under some circumstances granting minor privilege in the form of reduced tax rates. Also the government shows certain degree of active interest in the development of the movement by providing some basic facilities, assistance and incentives through measures in fiscal, economical or agricultural policy. Such as co-operative matters, provision of training facilities, allowing the use of government owned facilities, subsidies, assessable credit among others.

Also, government takes active roles in organizing and controlling co-operative. Special government ministries are created to effect this direct involvement. That is, taking active part in forming and organizing co-operatives.



According to Margaret Digby’s quotes “what disting wished co-operative belongs partly to end and partly to means” co-operative indisputably produce effects which are ‘MICRO’ as well as “MACRO”. But it is more relevant to concentrate on the macro because of its significant and important to the development of co-operatives in Anaocha and society at large.

Capitalist believes that co-operative is a “value” meant to substitute parts of the competitive capitalist system not functioning well. In other words, co-operative is not to be seen as a substitute of capitalism, but a means towards making it more competitive. Co-operative help to keep our free enterprise system more co-operative.

Macro effect of co-operative simply emphasis the basic economic, social, institutional, cultural benefits which the entire citizenry enjoy as a result of the operation of co-operative societies in the system. It is in line with this that prime minister Jaroaharlal Nehru (late of India observed with the idea of co-operation said this of co-operative: “The idea of co-operation is something much more the merely an efficient and economic way of doing things. It is economic, it is fair, it equalizes and prevents disparities from growing. But it is something even deeper than that. It is really a way of life and a way of life which is certain by the capitalist way of life.

Therefore, these statement about co-operative is their relevant in economic, social and institutional transformation of a nation. Whether it is capitalist, socialist or mixed economy or economics that want to be co-operative, there is always a macro effect.

Also, before discussing the macro effect of co-operative in Anaocha, it is very important to recall some of the reasons of establishing co-operative in developing countries such as:

1. Improving the economic, social and cultural situation of persons of limited resources and opportunities as well as encouraging their spirits of initiative.

2. Increasing personal and national capital resources by the encouragement of thrift, by eliminating usually and by the sound use of credit.

3. Contributing to the economy and increased measure of democratic control of economic activity and of equitable distribution of surplus.

4. Increasing national income export revenue and employment by a fuller utilization of resources for instance, in the implementation of systems of agrarian reform and of land settlement aimed at bringing fresh areas into productive use and in the development of modern industries, processing local raw materials.

Conclusively, Puri enumerated the importance of co-operative development in general to be:

1. Fostering economic development.

2. Promotion of social justice

3. Strengthening of political democracy.



The macro effects of co-operative as thus:

1. Increasing Competition: The organizational operations of co-operative societies in Anaocha has brought about the increase in competition in the goods and services. For instance, the agricultural product (garri) cost will be reduced when the co-operative societies embark on the commercial cultivation of garri, thus the competition exists among the products and its substitute at a reduced price and high quality at moderate quantity.

2. Reducing Inflation: As inflation thus means the persistant increase in price of goods and services. Co-operative societies in Anaocha has reduced the rate of increase in goods and services especially in the agricultural sector and labour productivity.

3. Increasing Productivity: Due to the mass involvement in production, the imput results to high out. This bringing about the increase in productivity. Also, this is a result of the subsidies provided as encouragement such as free machinery services leading to high production output by the co-operative society. Also, the macro effects of co-operatives in Anaocha could be observed in the following areas.

1. Raising the level of average income.

2. Ensuring capacity utilization of costly facilities.

3. Enlightening the masses.

4. Transfer, sharing and diversification of risks.

5. Inculcating democratic principles and community spirit.

6. Promoting rural development.

7. Introducing technical innovation.

8. Mobilization of savings employment generation.

The above and more are the ubiquitous roles played by co-operative in a developing economy. The irony of these macro effects is that the co-operative does this at no cost to the society or government. The macro effects therefore means the derived benefits of co-operative to the general society.

So, co-operative provides social, economic, political and institutional transformation in any economy which makes it preponderant in political economics of communism, fascism, nascism, communism, capitalism and mixed economies.



1. Legislation: The government provide the co-operative laws that give the provisional operation. Such laws was enacted in the years 1935, 195.. and 1993. Thus, guiding the existence of the co-operatives and the development of business and co-operative to flourish.

2. Supervision: The role of tied by the government to the co-operative movement towards the development of the co-operatives. Government undergoes the duties on the following sectors: Auditing, Arbitration, Inspection, Liquidation and education among others.

3. Technical Assistance: Government employees serves as extension agents, education and other specialized functions which render co-operative economics effective and efficient.

4. Financial Aid: Government fund co-operative and other specialized agencies. These funds constitute block sum in financing co-operative. This is another function which tie the hands of the movement.

5. Education: The government at all levels (local, state and federal govt.) propagate co-operative education. As various state government run their own co-operative college, polytechnics and universities where co-operative education are taught.

Nnamdi Azikiwe university Awka, Enugu state university of science and technology (ESUT), including Institute of Management and technology (IMT) remain excellent centers where co-operative is taught throughout West Africa. All these are under the auspices of government. In Anaocha, all the co-operative activities fall under government control. To buttress this fact, Anaocha co-operative societies decree NCSD (1993) gives the Registration wide and far reaching powers.

Other operational role of government to co-operative includes:

1. To register co-operative societies.

2. To approve bye-laws of the societies and amendments there to.

3. To have access to all the books, papers and securities of a registered society and inspect its activities.

4. To approve the investment of co-operative funds.

5. To audit co-operative accounts.

6. To approve the sharing of net surplus and the payment of dividends.

7. To conduct enquiry into the constitution and financial condition of registered societies.

8. To call special general meetings of co-operative societies.

9. To settle disputes or appoint arbitration.

10. To make legally or appoint arbitration

11. To wind-up a society.

12. To appoint direct and control liquidation.

13. To attach the property of persons intending to defraud.

14. To cancel the registration of liquidated societies.

15. To dispose of surplus on liquidation.



In chapter one, a number of sub-topics were treated to facilitate adequate background to this report, they included the following:

Background of the study, co-operation in the traditional society and the advent of modern co-operatives in Nigeria.

Other matters treated also in this chapter include statement of problems, purpose of the study, significance of the study, the research question, definition of terms and limitation of the study. The chapter served generally as the introduction to the report.